As headwinds build up, it's getting harder to read the oil market

A CLOUDY outlook confronts oil as it has become harder lately to nail down if crude can keep its mojo next year after a blockbuster 2021.

For one, the outcome of last week's hotly-anticipated meeting by the Organisation of the Petroleum Exporting Countries and allies (Opec+) was a surprise.

The influential grouping of petro-nations was largely expected to re-think, and perhaps even pause, its previously agreed plan to hike output next year after the US released crude reserves to tamp down surging gas prices. The emerging threat from the potentially more transmissible Omicron virus variant which could dent energy demand had further fuelled the notion that the alliance would restrain supply. Instead, at last week's meeting, Opec+ decided to stay the course with the plan to add 400,000 barrels per day to global supplies in January. But supply uncertainties linger for oil as the group has left the door open to reconsider production levels - this could include output cuts - if the situation warranted it.